Employees protest 10 percent pay cut

Jan. 28--TRAVERSE CITY -- Dianne Thompson plans to enjoy retirement in her home near Spider Lake, but recent Grand Traverse County benefit cuts could create some unpleasant financial ripples.

Those cuts to non-contract, defined-benefit workers like Thompson -- a county department of public works employee -- will cost her about $6,400 this year. She said that's roughly equivalent to nine monthly mortgage payments.

"At this point, I'm thinking I'm going to have to get ... a second job," she said.

Thompson and the county's eight other non-contract, defined-benefit employees plan to attend county commissioners' strategic planning session on Saturday and ask them to reconsider a measure that slashed their retirements and pay. That April commissioner-approved resolution halved those employees' pension multiplier and required them to pay 10 percent of their gross wages toward retirement plans starting Jan. 1.

The group includes several of the county's longest-serving supervisors and elected officials. Their effective 10 percent pay cut already is under review after a county employee union approved a 6 percent pension contribution, said county Administrator Tom Menzel.

"We want to be consistent across the board," he said. "We're asking the other groups to do 6 percent for defined benefits."

Menzel said the 10 percent measure arose as a way to "catch up" with the county's mounting $50-plus million pension debt and other legacy costs. He said those non-contract, defined-benefit employees never contributed toward their own pensions. That put the cost on future generations, he said.

"It would start the precedent of somebody contributing toward pension plan going forward," he said.

But Dorothy Stremlow, a former Grand Traverse County Commission on Aging employee, said the required $400 per paycheck benefit cuts under the measure, as well as a new 20 percent contribution toward health insurance premiums, confronted her with a difficult choice:

Continue work or retire for effectively the same income.

"It pretty much cinched that I would retire at that time," she said.

Stremlow in December ended her 20-plus years at the COA, a span in which she helped seniors as a home health care worker. She said it's a choice other non-contract, defined-benefit employees couldn't or didn't make, even though they faced the same financial hardship.

One such employee, county Prosecutor Bob Cooney, said the group all have worked for the county at least 17 years. He decried the cut, which didn't apply to union employees, as the most drastic in his 23 years with the county. It was proposed and passed without those employees being consulted, he said.

"Over time, people tend to count on more and more what the promised benefit was," he said. "It's kind of like pulling the rug out from under them."

The nine affected employees crafted a memo that states when commissioners made the pension cut they did so under two faulty assumptions -- a projected $4.1 million budget deficit and anticipated "draconian" cuts required by the Municipal Employees' Retirement System, the county's retirement plan provider.

Both assumptions failed to pan out last year, which ended with a balanced county budget and a MERS offer to extend pension debt repayment without sweeping cuts. Cooney echoed the memo's note that the commissioner-approved cuts severely impacted nine employees while having no effect on 377 other current employees and even more retirees.

"In my opinion, that's what makes it so unfair," he said.

Menzel said he felt badly for the employees who received promises. He said they should be angry at past commissioners who failed to fully fund pensions, a mistake with economic consequences. He said he'll provide current commissioners with options.

"There is no solution that will make everybody happy, nor is there any solution that will make anybody happy," he said.

Cooney said those employees just want to be treated fairly.

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